by: darning zhang portobello college dublin

"STUDY ON ESTABLISHMENT OF MANAGEMENT INFORMATION SYSTEMS (MIS)

IN DISTRIBUTION CENTERS"

By: Darning Zhang

A Dissertation in Partial fulfilment of the "HETAC Bachelor of Arts Degree (Honours) in Business Information Management, 2003"

Portobello College Dublin

JUNE 2003

Supervised by: Brid Lane

I declare that this dissertation is the result of my own independent investigation and that all sources are duly acknowledged in the Reference and Bibliography.

This is to certify that, except where specific reference is made, the work described within this project is the result of the investigation carried out by myself, and that neither this project nor any part of it, has been submitted in candidature for any other award other than this being presently studied.

Any material taken from published texts or computerised sources have been fully referenced, and I fully realise the consequences of plagiarising any of these sources.

I

Copyright All items archived in DBS Esource are made available to the end-user under the provisions of the Copyright and Related Rights Act, 2000 (Ireland). All items are protected by copyright, with all rights reserved, unless otherwise indicated. Usage You are free to use the digitised thesis under the following conditions: You must attribute the work using the normal conventions You may not use this work for commercial purposes. You may not alter, transform, or build upon this work. Electronic or print copies of this digitised thesis may not be offered to anyone for any purpose. This copy has been supplied on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement.

Ackno1Nledgernent

I would like to take this opportunity to extend my gratitude to the following for their help and support in the preparation of this dissertation.

Firstly, I wish to acknowledge the assistance provided by my dissertation supervisor Bnd Lane for regarding the development of this report and project and providing helps throughout this dissertation.

Brid Lanes guidance and direction proved very beneficial in increasing my understanding of natural language processing and knowledge of relevant Management Information Systems (MIS).

I wish to thank Bnd Lane for the informative research material she provided, and for the tuition time she afforded me whenever it was required.

I also wish to thank my mother - Mrs Guiyuan Zhang, my friend -Qing Qin and Muyu Tang, and my co-workers for their continued support and encouragement in my studies.

II

Abstract

This dissertation outlines the Information Systems (IS) revolution and the

strategic role of Information Systems, organizations, and the evaluation

of Management Information Systems (MIS) from their conception to

present day_

Today, online web site are already available in different types of business

sectors such banking, insurance, stocks, auctions and airline industries

and so on. So, using E-commerce and E-business for organizations and

individual people is getting more and more important

This dissertation outlines the Supply Chain Management (SCM) is a

unifying concept incorporating both E-procurement and sales, co

ordination of all supply chain activities from suppliers and delivery of

products to customers, source of competitive advantage via integration

and possibility for enhancement through buy-side electronic-commerce,

internal facilitations and sell-side electronic commerce, and emphasis on

inter-party relationships and flow of information.

This dissertation outlines the tool of storagement and warehousing in

today's modem Distribution Centers by using the effective Management

Information System (MIS) in order to obtain the competitive business

environment. It is discussed in some relevant materials and cases.

And this dissertation also analyzes the characteristics and content of

Management Information System (MIS) in Distribution Centers,

discusses the platform constitution of information management system

III

and the network topology structure thereof and puts forward the guiding

principles for constructing such a system currently.

Some Keywords:

.:. Information Systems (IS)

.:. Management Information Systems (MIS)

.:. Supply Chain and Supply Chain Management (SCM)

.:. Storgement

.:. Warehousing

.:. Distribution Centers

IV

Research Methodology

The objective of this dissertation is to analyse the Management

Information Systems (MIS) using for Distribution Centres. The following

brief outlines the objectives of this research dissertation and the

methodology used to investigate this topic.

In order to achieve the above objectives a combination of primary and

secondary research was applied.

Primary Research

The primary objective of this research dissertation is to investigate the

evolution of Distribution Centres by using Management Information

Systems (MIS), to analyse Value Chain, Supply Chain and Demand and

outline the new and advanced Information Technologies in storagement

and warehousing in today's Distribution Centres and also dynamic

business environment, and to provide a combination of conclusions and

recommendations.

In total, interviews were held in person and conducted over the phone.

From the interviews conducted a valuable insight was gained into the

practicalities of the purpose of this dissertation.

Also the questionnaire was used during the primary research, sent about

100 questions' forms to the different group of individual people and

organisation. Then collected and analysed the results. (Details in

Appendices)

v

Secondary Research

There were many sources of information used in this category.

Newspaper articles, Journal articles, Reports, Government publications,

Internet articles and books offered plenty of reference material to draw

upon. In general it was found that newspaper and journal articles offered

the best form of information. This is due to the up to the minute fact

available which are difficult to obtain when referring to books or reports.

In compiling reference material the following libraries have been used:

• Central Statistics Office Library, Rathmines

• D.LT Library, Kevin Street and Bolton Street

• Enfo. Library, S1. Andrews Street

• The Hac centre Library

• Portobello College Library

VI

Table of Contents

Declaration Acknowledgement Abstract Research Methodology Table of Contents List of Figures and Table Introduction

1. Information Systems

1.1 What is an Information System? 1.1.1 A business Perspective on Information Systems 1.1.2 Contemporary Approaches to Information Systems 1.2 The Network Revolution and the Internet 1.3 Internet Commerce - A New Paradigm for Business 1.3.1 Internet-commerce 1.4 Why Information Systems? 1.4.1 The Competitive Business Environment 1.5 "Value Chain" Concept

I II III V VII X XI

1

2. Supply Chain Management explained 10

2.1 Supply Chain 2.2 Supply Chain Management (SCM) 2.3 How is the Supply Chain works? 2-4 The future of Supply Chain Management (SCM)

3. Distribution Centers

3.1 Defense Distribution Center (DDC) 3.2 Distribution Functions 3.3 Distribution Standard System (DSS) 3-4 Concept of Operations 3.5 Joint Total Asset Visibility (JTAV)

4. Warehousing

4.1 Introduction 4.2 Keep track on profitable activities 4.3 Cross-docking 4.4 Specifications

13

22

VII

4·5 Radio Frequency 4·6 Storagement

5· Management Information Systems (MIS) 26 in Distribution Centers

5·1 World-Wide Express (WWX) 5·2 Commercial Air Lines of Communication

(COMALOC) 5·3 Medical Express (MedEx) 5·4 Radio Frequency Tagging (RFTag) 5·5 Automated Manifest System (AMS) 5·6 Dedicated Truck Deliveries 5·7 Call Centers 5·8 Performance Oriented Packaging (POP) 5·9 Business Systems Modernization 5·10 UPS Competes Globally with Information

Technology (case)

6. Content of the Management Information 33 in a Distribution Center

6.1 Analysis on the Layers of Information Management in a Distribution Center

6.2 Basic Work Flow of Information Management in a Distribution Center

,. Configuration and Construction of the 38 Information Management System Platform in a Distribution Center

7.1 Structure of the Information Management System Platform in a Distribution Center

7.2 Network Configuration of the Management Information System in a Distribution Center

8. Guideline for Construction of the 42 Management Information Systems in a Distribution Center

9· Conclusion 44

References A

VIII

Bibliography Appendices

C F

IX

List of Figures and Table

Fisure 1.1

Fisure 1.1.1

Fisure 1.1.2

Fisure 1.5

Fisure 6.1

Fisure 7.1

Table 1.2.1

(An Information System)

(A Business Perspective on Information Systems)

(Contemporary Approaches)

(Information in the Value Chain)

(Information Manasement Layers in a Distribution Center)

(Framework of the Information Manasement Platform of the Distribution Center)

(The Chansins Contemporary Business Environment

x

Introduction

Globalization of the world's industrial economies greatly enhances the

value of infonnation to the finn and offers new opportunities to

businesses. Today, infonnation systems provide the communication and

analytic power that finns need for conducting trade and managing

business on a global scale. Controlling the far-flung global corporation

communicating with distributors and suppliers, operating 24 hours a day

in different national environments, serving local and international

reporting needs is a major business challenge that requires powerful

infonnation system responses.

Globalization of trade, the emergence of infonnation economies, and the

growth of the Internet and other global communications networks have

recast the role of infonnation systems in business and management. The

Internet is becoming the foundation for new business models, new

business processes, and new ways of distributing knowledge. Companies

can use the Internet and networking technology to conduct more of their

work electronically, seamlessly linking factories, offices, and sales forces

around the globe.

The Internet has created a universal platfonn for buying and selling goods.

It provides powerful capabilities for driving important business processes

inside the company and for linking such processes electronically to those

of other organizations.

Today's supply chain management (SCM) relies on the chain being a

giant loop, with data feedback from the points of sale infonning all of the

elements back along the chain. The IT systems available to this modern

XI

SCM integrate the traditional processes of specification, ordering, stocks

and so on with logistics and fulfilment and also with the market front end.

Every item sold or ordered feeds back into the information flow,

potentially triggering replenishment manufacture at the other side of the

chain loop.

Warehousing is a solution designed to deliver an optimum between

customer satisfaction and efficient warehouse management. The

warehousing function includes the physical storing of materiel, as well as

selecting that materiel and preparing it for shipment. Warehousing also

includes maintaining the stock locator system, controlling all Materiel

Release Orders (MROs), keeping the storage plans current, and preparing

space utilization reports. By ensuring that the operation in the warehouse

follows the optimum based on the available capacity. The customers'

requirements are taken into account during the whole process. Each

activity is part of the total warehouse process whilst at the same time

Service Level Agreements are monitored and constantly checked.

Generally, a distribution center is located at the traffic center of the city.

As the center of centralized commodity processing in circulation for the

city and chain enterprises, it covers all or most links of commodity

distribution including transporting for distribution, storing, packaging,

processing in circulation and information processing. In general, therefore,

a distribution center has multiple business functions and a huge

throughput with the characteristics of high frequency and small batches in

operation links. Thus the information is wide-ranging and extensive in

volume, causing complexity and diversity of the business management.

Information needs to be transmitted and processed dynamically and

timely in many cases to meet the requirements of rapid responding, exact

XII

processing and cost saving. Therefore, construction of the information

management system for a distribution center is very significant not only

for improving the routine operation efficiency of the distribution center

but also building up its service ability.

XIII

Study on Establishment of Management Information Systems (MIS) in Distribution Centers

1. Information Systems

1.1 What is an Information System?

An information system can be defined technically as a set of interrelated

components that collect ( or retrieve), process, store, and distribute information to

support decision making and control in an organization. In addition to supporting

decision making, coordination, and control, information systems may also help

managers and workers analyze problems, visualize complex subjects, and create

new products.

Information systems contain information about significant people, places, and

things within the organization or in the environment surrounding it (Figure 1.1). By

information we mean data that have been shaped into a form that is meaningful and

useful to human beings. Data, in contrast, are streams of raw facts representing

events occurring in organizations or the physical environment before they have

been organized and arranged into a form that people can understand and use.

Regulatory Agencies

JUNE 2003

Customers

Input

I

ENVIRONMENT

ORGANISATION

INFORMATION SYSTEM

Processing

r---- Classify Arrange

Calculate

Feedback

Stockholders

Figure 1.1

Su liers

Output

Competitors

study on Establishment of Management Information Systems (MIS) in Distribution Centers

Three activities In an information system produce the information that

organizations need for making decisions. These activities are input, processing,

and output. Input captures or collects raw input into a more meaningful form.

Output transfers the processed information to the people who will use it or to the

activities for which it will be used. Information systems also required feedback,

which is output that is returned to appropriate members of the organization to help

them evaluate or correct the input stage.

Informal information systems (such as office gossip networks) rely, by contrast, on

unstated rules of behavior. There is no agreement on what is information, or on how

it will be stored and processed.

Formal information systems can be either computer-based or manual. Manual

systems use paper-and-pencil technology. These manual systems serve important

needs. Computer-based information systems, in contrast, rely on computer

hardware and software technology to process and disseminate information. The

"Window on Technology" describes some of the typical technologies used in

computer-based information systems today.

1.1.1 A business Perspective on Information Systems

From a business perspective, an information system is an organizational and

management solution, based on information technology, to a challenge posed by the

environment. Examine this definition closely because it emphasizes the

organizational and management nature of information systems: To understand

information systems - to be information systems literate as opposed to computer

literate a manager must understand the broader organization, management, and

information technology dimensions of systems (see Figure 1.1.1) and their power to

provide solutions to changes and problems in the business environment.

JUNE 2003 2

Study on Establishment of Management Information Systems [MIS) in Distribution Centers

Technology

Management

Figure 1.1.1

1.1.2 Contemporary Approaches to Information Systems

Multiple perspectives on information systems show that the study of information

systems is a multidisciplinary field; no single theory or perspective dominates.

Figure 1.1.2 illustrates the major disciplines that contribute problems, issues, and

solutions in the study of information systems. In general, the field can be divided

into technical and behavioral approaches. Information systems are socio-technical

systems. Through they are composed of machines, devices, and "hard" physical

technology; they require substantial social, organizational and intellectual

investments to make them work properly.

JUNE - 2003 3


Management Science

Psychology

Figure 1.1.2

Sociology

Behavi oural Approaches

1.2 The Network Revolution and the Internet

One reason that information systems play such a large role in organizations and

affect so many people is the soaring power and declining cost of computer

technology. Computing power which has been doubling every 18 months, has

improved the performance of microprocessors 25,000 times since their invention

more than 25 years ago. With powerful, easy-to-use software, the computer can

crunch numbers analyze vast pools of data, or simulate complex physical and

logical processes with animated drawings, sounds, and even tactile feedback.

The soaring power of computer technology has spawned powerful communication

networks that organizations can use to access vast storehouses of information from

around the world and to coordinate activities across space and time. These networks

are transforming the shape and form of business enterprises and even our society_

The world's largest and most widely used network is the internet. The Internet is

an international network of networks that are both commercial and publicly owned.

JUNE- 2003 4


The Internet connects hundreds of thousands of different networks from over 200

countries around the wor1d. More than 150 million people working in science,

education, government, and business use the Internet to exchange information or

perform business transactions with other organizations around the globe. The

number of Internet users is expected to surpass 300 million by the year 2000.

The Internet is extreme1y elastic. If networks are added or removed or failures

occur in parts of the system, the rest of the Internet continues to operate. Through

special communication and technology standards, any computer can communicate

with virtually any other computer linked to the Internet to exchange business

transactions, text messages, graphic images, and even video and sound. Whether

they are located next door or on the other side of the globe.

1.3 Internet Commerce - A New Paradigm for Business

Prior to 1994 the Internet was a network of computers used by the academic and

military communities. It has paved the way for the internet to emerge as a tool to

advance commercial and leisure activities. New terminology has entered the

business and academic communities at a rapid rate. Terms such as, Internet

commerce, electronic commerce, cyberspace, cybermediaries, market space and the

virtual organization are just a few that have been used in relation to the Internet in

recent years. Whilst these terms seemingly offer new opportunities for business, in

an era often referred to as the information age or society, they also engender much

confusion, particularly for those people who are attempting to evaluate the potential

benefits and pitfalls from Internet commerce. At the present time, Internet

commerce remains very much at the developmental or experimental stages, and

business managers have very little experience from which to draw in distinguishing

hype from practical reality (Lymer et ai., 1997)

JUNE - 2003 5


1.3.1 Internet-commerce

What is the Internet? The question is tremendously difficult to answer because the

Internet is so many things to so many people. Generally, it is:

• A global computer network connecting millions of computers.

• Originated from US defense funded Advanced Research Projects Agency

(ARPA) in 1969.

• It has over 100 million users in 170 countries is growing at 10% per month

50% every 54 days in the UK, a new network is added every 30 minutes.

As with every new technological artifact - from the mainframe computer to the

personal computer (PC) - a great deal of optimism and hype surround the Internet

and its potential to change the way businesses are managed, co-ordinated, costed

and controlled. Certainly, the widespread use of the PC in industrialized countries

has revolutionized the world of work, as jobs have been simultaneously eliminated

and created, thus contributing to the turbulent labour market in the last two decades.

The same may be true of the Internet, following its launch in the business

community from 1994 onwards (Kalakota and Whinston, 1996).

1.4 Why Information Systems?

Until recently, information itself was not considered an important asset for a firm.

The management process was considered a face-to-face, personal art and not a far

flung, global coordination process. Today it IS widely recognized that

understanding information systems is essential for managers because most

organizations need information systems to survive and proper.

1.4.1 The Competitive Business Environment

Three powerful world wide changes have altered the environment of business. The

JUNE - 2003 6


first change is the emergence and strengthening of the global economy. The second

change is the transformation of industrial economies and societies into knowledge

and information-based service economies. The third is the transformation of the

business enterprise. These changes in the business environment and climate,

summarized in table 1.2.1, pose a number of new challenges to business firms and

their management.

Globalization

Management and control in a global marketplace

Competition in world markets

Global work groups

Global delivery systems

Transformation of Industrial Economies Knowledge - and information based economies

Productivity

New products and services

Knowledge: a central productive and strategic asset

Time - based competition

Shorter product life

Turbulent environment

Limited employee knowledge base

Transformation of the Enterprise Flattening

Decen tralization

Flexibility

Location independence

Low transaction and coordination costs

Empowerment

Collaborative work and teamwork

Table 1.2.1 (The Changing Contemporary Business Environment)

1.5 "Value Chain" concept

Information technology is changing the way companies operate. It is affecting the

JUNE - 2003 7

-

I

I

•


entire process by which compames create their products. Furthermore, it lS

reshaping the product itself: the entire package of physical goods, services, and

information companies provide to create value for their buyers.

An important concept that highlights the role of information technology m

competition is the "value chain." (Figure 1.5) This concept divides a company 's

activities into the technologically and economically distinct activities it performs to

do business. These are called: "value activities." The value a company creates is

measured by the amount that buyers are willing to pay for a product or service. A

business is profitable if the value it creates exceeds the costs of performing the

value activities . To gain competitive advantage over its rivals, a company must

either perform these activities at a lower cost or perform them in a way that leads to

differentiation and a premium price (more value).

Information in the Value Chain (adapted from Porter & Millar, 1985)

finn Infrastructure (e.g. plollllillg ll/ode/s)

H.R.M (e.g. GUb/mated p enxJllllel systems)

Technology ~-elopnent (e.g. CA.D. )

Prorurement (e.g. on-lI'lIe On/f rillg)

lll"o",~,

It,;'istln: Operof;(/m co!! . e.g.

uutllllla'cd IAutulUated \mn:h .. u~ repair

scn1(r

(Imi>o/flld

'Ir:I\tin l.'oJ:.

( 'u,tJlfll"r order P-11U'"

Snle.~1

Marketing e.g.

Tele marketing

e.g. remote

S4!nicing orequipt

OIenl

Figure 1.5 (Information in the Value Chain)

A company's value chain IS a system of interdependent activities, which are

connected by linkages. Linkages exist when the way m which one activity IS

performed affects the cost or effectiveness of other activities. Linkages often create

JUNE - 2003 8

-

~'


trade-offs in performing different activities that should be optimized. Linkages also

require activities to be coordinated. On-time delivery requires that operations,

outbound logistics, and service activities should function smoothly together.

Linkages not only connect value activities inside a company but also create

interdependencies between its value chain and those of its suppliers and channels.

The value chain for a company in a particular industry is embedded in a larger

stream of activities that we term the "value system". The value system includes the

value chains of suppliers, who provide inputs (such as raw materials, components,

and purchased services) to the company's value chain. The company's product

often passes through its channel's value chains on its way to the ultimate buyer.

Finally, the product becomes a purchased input to the value chains of its buyers,

who use it to perform one or more buyer activities.

JUNE 2003 9

Study on Establishment of Management Information Systems (MISl in Distribution Centers

2. Supply Chain Management explained

2.1 Supply Chain

The supply chain is a handy phrase that has been around in the management

textbooks for a long time, referring to the links between the manufacturing and

distribution functions in a classic enterprise. Its span was from raw materials and

components to the logistics of getting the finished products from the manufacturer

to the reseller, distributor or importer.

2.2 Supply Chain Management (SCM)

Clearly, the entire process depends on automated communications between all of

the systems involved, in all of the businesses in the supply chain. The traditional

communication links were electronic data interchange (EDI) together with leased

line or dial-up computer-to-computer file exchange. But, the impact of the internet

has been enormous in this whole area, bringing speed and ease of communication

and also allowing the smaller suppliers in the chain for the first time to be

integrated into the heavyweight systems of their customers. The grocery multiples

are a very good example of a sector where this is all advancing rapidly.

Supply and demand are the fundamentals of all forecasting and all strategic

planning, whether yours is a micro-business or a multinational, in manufacturing or

finance, high technology or transportation. Integrated SCM promises to do for

productivity and efficiency in this decade what just-in-time did for inventory

control and responsiveness in the Eighties and Nineties.

The company can simultaneously improve customer service and reduce inventories.

The concept stretches even further for manufacturers - if you integrate supply chain

concepts into your product development and design plans early on, you will gain

economic and competitive advantage throughout the entire product life cycle.

JUNE 2003 10


Sophisticated SCM uses the best of today's IT to set up automated data sharing to

an ever-growing network of factories, suppliers of raw material or components,

distribution centers, retail outlets even delivery vehicles. The aim is for each player

in the supply chain to conduct business with the latest and best information from

everyone else in the chain increasingly via the internet, so guiding supply and

demand into a more perfect balance. The purpose is to move product from the

point-of-origin to that of consumption in the least amount of time and at the lowest

cost.

2.3 How is the Supply Chain works?

SCM works across functions and several management disciplines contribute to

supply-chain optimization efforts, including forecasting, distribution management,

production planning and transportation planning.

SCM software also enables its user companies to model complex supply chains and

rapidly generate integrated solutions to problems such as production bottlenecks,

supply interruptions and customer order changes. These capabilities enable

companies to make better informed decisions in order to improve operating

efficiency, customer satisfaction and return on assets.

All of this is undoubtedly wonderful. But it will be apparent at this stage that

supply chain management is like enterprise resource planning or today's darling,

Customer Relationship Management (CRM) in that it is really all-embracing. So it

is necessarily more of a strategic business planning approach or philosophy than a

straightforward system or set of systems. One consultant puts it neatly: "It's a bit of

a Rubiks cube - each element may be perfect, but that does not mean that the whole

is perfectly organized."

JUNE 2003 tt


While SCM has, in the past, been the exclusive territory of the large organization,

right at the other end of any scale, small businesses can apply elements of SCM

cost-effectively and relatively speedily. In fact you could say that chain email is the

simplest form of SCM. If I am a small craft cheese maker in West Cork, a

straightforward email order from my distributor or one of the big multiples is

perfectly fine. The complexities of the system that produced that order are none of

my concern.

2.4 The future of Supply Chain Management (SCM)

SCM is principally concerned with the day-to-day efficiency of businesses working

together around the supply chain and maximizing the benefits from sharing - almost

pooling - their management information resources. An enquiry about the status of

an order, for example, will often involve an automatic and invisible connection (yet

another benefit of 'always on' internet connection) that lets the enquirer look

directly into the supplier's information system.

E-commerce is also emphasizing an element which has been present for many years

anyway. The customer may order my product from my company on the web but it

will actually be delivered by a distributor or agent, by a logistics company from a

warehouse hub, or increasingly from the sub-manufacturer which actually makes

the entire finished item. Cisco, for example, no longer physically makes any of its

products yet continues to be a technology world leader. Outsourcing at that total

level takes SCM of a supreme order. The internet, however, is offering the likes of

our Cork cheese supplier a chance to use more modest forms of SCM.

JUNE-2003 12


3. Distribution Centers

The distribution operation responsibilities include receipt, storage, issue, packing,

preservation, worldwide transportation, in transit visibility and redirecting en-route,

when required, of all items placed under its accountability.

3.1 Defense Distribution Center (DDC)

The example is that the Defense Distribution Center CDDC) is headquarters to the

22 Defense Logistics Agency CDLA) Distribution Centers located throughout the

United States, Europe, Japan, and Hawaii. The 22 sites hold over 3.6 million stock

numbers in 325 million cubic feet of storage space and process over 24 million

transactions annually. Clothing and textiles, electronics, industrial, general and

construction supplies, subsistence, medical material and the military services'

principle end items are among the commodities for which the distribution function

and personnel are responsible. This unit will cover the overall wholesale

distribution operation of a DLA Distribution Center.

3.2 Distribution Functions

In the past, 'distribution' was about depots, the storage of material and responding

JUNE - 2003 13


to basic customer needs. This narrow view of distribution as a minor link in the

supply chain has changed. The depots are now distribution centers - a robust

operation to support the business and organizations anywhere, anytime for logistics

and transportation support. Sometimes, many of the commodities and types of

equipment have no commercial use, warehousing will remain an important and

fundamental aspect of our business.

All Distribution Centers perform similar functions to service and maintain stock,

but their missions can be identified in one of three distinct categories:

1. Strategic Distribution Platforms (SDPs) are large facilities that serve as the

primary source for the majority of material shipped to customers within their

areas of responsi bili ty.

2. Collocated Distribution Centers (CDCs) provide local support to the

Services maintenance missions located at or very near each Center. These

Distribution Centers may also serve as the primary center for the storage,

maintenance and issue of a specific commodity, e.g. Ozone Depleting

Substances that require unique facilities or handling procedures.

3. Theater Distribution Platforms (TDPs) provide in theater supply support

for high demand or critical stock that is needed in their assigned area of

responsibility. By placing stock close to the overseas customers, it can

provide faster delivery to customers at a lower overall cost. These TDPs

increase the Theater Readiness of all services.

In addition to the above facilities, Distribution Center also manages a contractor

operated Premium Service Facility. This unique facility provides for the storage

and shipment of high dollar value, low stock level and exceptionally critical stocks

for customers. The contractor stores these critical items and ships upon demand

directly into the commercial overnight delivery system.

JUNE - 2003 14


Many factors have influenced distribution centers over the past ten years, including

DMRD 902, base realignments and closures and commercial activities' reviews

conducted under the auspices of the Office of Management and Budget's Circular A

76. This means that all of distribution centers are being studied to determine which

is more cost effective, to maintain distribution functions as Government operated or

to tum operations over to private contractors who have bid against a statement of

work to provide distribution services. To date, nine studies have been completed

with the centers at Columbus, Richmond, and Albany remaining government

operations. Contractors are now operating six distribution centers: Barstow, Warner

Robins, Jacksonville, Cherry Point, Hill and San Diego.

At many Centers, the workforce is flexible, spending parts of each day in two or

more of the different functions. The major functions of the Center are:

I. Command and Administration - Each Center will have a Commander or

Director and an administrative support staff responsible for monitoring

Center performance, managing AISs, and other administrative and security

functions.

2. Receiving - The Receiving function includes offloading of freight, receipt to

include proper handling, processing and routing of classified, controlled and

hazardous material, inspection classification, and reclassification (using Kind,

Count Condition procedures) of all incoming materiel and the routing of that

materiel to storage. They also check packaging MIL 2073-IC and markings

MIL-129 and use research data systems such as Fedlog and FLIS. The

function also includes maintaining documentation, reporting discrepancies,

and identifying items requiring inspection or testing by Quality Assurance

personnel.

JUNE - 2003 15


3. Warehousing - "Stock control, is to manage motion" (details in

chapter 4)

4. Inventory Integrity - Workers in Inventory Integrity conduct physical

inventories, location surveys, denial and causative research, shelf-life

inspections, and surveillance inspections. They conduct denial and causative

research. They execute inventory adjustments and maintain the accountable

inventory records. The Accountable Officer is a Command Staff position to

oversee the Inventory program. Shelf-life inspections, surveillance

inspections and other stock readiness functions are performed in this area or

within Warehousing.

5. Transportation and Shipping - The transportation and shipping function

includes developing, implementing, and administering shipment planning

and traffic management. Transportation and Shipping operates the freight

terminal, dispatching shipments through all modes and carriers.

JUNE - 2003 16


Automated Information Systems (A ISs)

3.3 Distribution Standard System (DSS)

DoD's Material Management and Distribution Board issued an Interim Systems and

Executive Agent Selection report. This report recognized the inefficiency of

maintaining multiple systems to support the DoD material disttibution function.

The board directed the selection of a single interim standard distribution system to

support DoD and the military services' distribution requirements. A comprehensive

functional and technical evaluation of the existing DoD distribution systems was

undertaken. The Army's AOD/MOD with SDS shell was chosen as the migration

system and renamed the Distribution Standard System (DSS).

DSS integrates all the basic center functions of receIvmg, storage, shipping,

inventory, and transportation. DSS also incorporates space planning, production

control and performance reporting. DSS even controls the use of Materiel

Handling Equipment (MHE), throughout the centers.

3.4 Concept of Operations

The concept of operations for DSS includes the following generic business rules:

• Support service unique requirements

• Meet readiness goals

• Improve processes

JUNE - 2003 17


• Reduce costs

The DSS incorporates the above rules into a multitude of core functions within the

DSS baseline. The core functions will be described in additional detail within the

paragraphs below:

- Workload Planning - COSIS/Shelf-life Management

- Receiving/PPP&M - Picking

- Storage - Packing

- Rewarehousing - Shipment Processing

- Inventory / Item data - Out loading

- ECS - RF Technology

The workload planning module validates the Materiel Release Order (MRO) and

builds all DSS history records. This module incorporates automatic downgrade

priority logic, accomplishes preliminary shipping mode assignment. This module

tlso has the capability to process emergency MRO/issue and free-flow capabilities.

bss also has production planning capabilities, to include issue banking, special

release/hold capabilities, and on-line/real time work-in-process visibility through

inquiry screens and on-line reports.

DSS receiving module provides the end-user with seven different Receipt Induction

Detail Requirements (RIDR) processes. These processes lead the distribution

center operator through the correct processing of various receipt types, such as

wholesale new procurement, local new procurement, retail, and various tum-INS

DSS also allows for single or multi-station processing for flexible operation

decisions. DSS provides for automatic access of Pre-positioned Material Receipt

Data (PMRD), by document number or NUN, on-line validation of receipt data

input, auto access to unique materiel storage exclusion files and optional overrides

JUNE-2003 18


for various storage induction options. DSS accomplishes automatic Issue from

Receiving (IFR) and generation of auto-RODs for participating services/legacy

systems.

PPP&M modules can be invoked directly from receIvmg, or materiel can be

'flagged' in storage locations for processing later. DSS allows for MRO issue from

PPP&M temporary storage locations, automated work order processing, and has

on-line interfaces with several services packaging data.

DSS storage modules accommodate up-to 16-position location field. DSS has rack

and bin pantograph capabilities, quantity-by-location (QBL), and a full-range ofRF

capabilities for real-time, bin-face, updates. DSS allows for storage segregation

logic for Hazmat, lot number, shelf-life, and DMISA items. Stow/put away

processes have real-time discrepancy capabilities and the ability to select or request

alternate locations. A full range of storage management and production reports is

available. Several pick options are available for the distribution centers including,

RF pick with paper, RF pick without paper, or CRT with paper. Centers may utilize

combinations of all options within their facilities. DSS allows and documents over

under picks and reports discrepancies on-line, real-time. Various pick sequence

options are available for automated facilities. RF allows for exception data

visibility at bin face. DSS provides for both manual and automatic/systemic

processing of rewarehousing functions.

DSS has a fully regulatory, automated COSIS shelf-life program that includes

cyclic and special inspection scheduling. Full RF programming is available. DSS

automatically allocates the appropriate shelf-life items from segregated storage by

type and expiration/manufacture dates.

Packing modules offer flexibility by handling two basic types of pack: Continuous

JUNE - 2003 19


pack processes allow for free-flow issue for dedicated customers to a designated

consolidation area. Discrete pack offers maximum shipment consolidation for

specific items for less-than volume customers. Pack programs encompass and

finalize the full-range of DoD marking and labeling requirements. These include

bar-coded military shipping labels (MSLs), container IDs, Automated Manifest

System (AMS) cards, and packing lists. DSS perfonns automatic re-mode on

actual weight identification and real-time address-check via global address DB.

Packing also includes manifests for local-delivery customers and interfaces with

other legacy systems for local delivery confinnation and accounting.

DSS Inventory includes physical and special inventories required. Numerous tools,

reports, and inquiries are available to the end-user to perfonn required research.

Daily/weekly/monthly reconciliations are accomplished to ensure internal and

external balance confonnity. RF processing is available to complete on-line, real

time updates. DSS is a fully compliant AMCL8-A system.

DSS provides for several out loading load capabilities including RF direct load for

volume, dedicated customers/routes and freight release programs to accomplish

LTL processing for non-volume customers. The freight documentation modules

include automatic processing of all shipping documents including GBLs, CBLs,

TCMDs, HAZMAT documents, and REPSHIPS. DSS also partners with

commercial businesses through electronic data interchange (EDI) transactions to

the Bank, a program called Power Track, and Federal Express, by Power ship

which exchanges tracking numbers.

• DSS also has modules to process the following applications:

• Truck control

• Recycle Control Point Processing

• Consolidation and Containerization Point processing

JUNE - 2003 20


• Small Anns Serialization Program

• Total Package Fielding (TPF)

• DEPMEDS / set assembly

The above functional processes incorporate distribution responsibilities. DSS

provides a streamlined, fully automated and comprehensive tool for end-users to

document and control the receipt, storage, care, issue, package, and shipment of

material to our customers worldwide on a daily basis.

This interactive system is available at a nominal cost, on a daily, near 24-hour basis,

with comprehensive end-user interfaces. It provides complete management and

operational infonnation, through reports, on-line inquiries, and special query

capabilities.

3.5 Joint Total Asset Visibility (JTAV)

JTAV is the capability to provide users with timely and accurate infonnation on the

location, movement, status, and identity of units, personnel, equipment, and

supplies. It provides the capability to act upon that infonnation to improve overall

perfonnance of logistics practices.

In-Storage. Assets In-storage at retail consumer sites, at retail intennediate storage

sites, at disposal activities, or in wholesale inventories, to include ashore and afloat

pre-positioned assets.

In-Process. The status of requisitions for organizations.

In-Transit. The status of assets moving though the transportation system.

JUNE- 2003 21

Study on Establishment of Management Information Systems rMIS) in Distribution Centers

4. Warehousing

4.1 Introduction

Warehousing is a solution designed to deliver an optimum between customer

satisfaction and efficient warehouse management.

The warehousing function includes the physical storing of materiel, as well as

selecting that materiel and preparing it for shipment. Warehousing also includes

maintaining the stock locator system, controlling all Materiel Release Orders

(MROs), keeping the storage plans current, and preparing space utilization reports.

By ensuring that the operation in the warehouse follows the optimum based on the

available capacity. The customers' requirements are taken into account during the

whole process. Each activity is part of the total warehouse process whilst at the

same time Service Level Agreements are monitored and constantly checked by

Chainware® alert monitor

Warehousing combines 3 worlds which makes it the solution for a public

warehouse environment with short order cycle times.

4.2 Keep track on profitable activities

Warehousing determines the activities that have to be performed and the partners

that have to be involved. The confirmation of services executed by the

subcontracting partners is reported back into Chainware® including a billing

forecast. Here, it is forwarded to billing and inventory management and the original

order is updated. Automated costs & charge calculations make the profitability of

all activities, even when outsourced, visible.

JUNE 2003 22


4.3 Cross-docking

In the process of cross-docking materials, materials are processed directly from the

goods receipt area to the point of use or goods issue area without first being put

away in the warehouse.

Warehousing enables a cross-location supply chain-oriented processing of cross

docking. Cross-docking enables a quick distribution of materials without

processing many steps or even put away in the distribution centers. Therefore,

fulfillment coordination has to provide timely information for the distribution

centers or other locations involved in the process. The inbound shipments have to

be identified, and processes concerning the contained packages or handling units

have to be prepared in order to avoid time-consuming repackaging. Warehousing

controls the communication between the central distribution centers, and creates the

order saying which handling units have to be handled and how. The actual

execution is fulfilled by site or warehouse management. Cross-docking also

includes handling of packages at trans-shipment points or terminal hubs without

warehouse management functions. Finally, the confirmation of services executed is

reported back to Chainware® and forwarded to billing and inventory management.

4.4 Specifications

Inbound order processing • Pre-notifications • Dock & Yard Management • Receipt • Blocking & Quarantine • Stock allocation • Cross-docking • Final intake

JUNE- 2003 23


Internal Processing • Cross-docking • Cycle counting • Relocation • Re-packaging • Value added logistics • Return Goods

Outbound order processing • Reservations • Property modification • Expire date control • Order collection • Replenishment • Shipment building

Warehouse management • Stock control • Multi-side planning • Capacity planning • Planning & control • Scheduling • Workload management

Order management • Order processing • Order release planning • Tracking & tracing • Interfacing with Material Handling Equipment • Weight and measuring system • Automated warehousing systems • Stock administration • Order-entry • Stock management • Billing • Pallet administration

JUNE - 2003 24

Study on Establishment of Management Information Systems IMIS) in Distribution Centers

Customs administration • Entrecote license (C-sum, C-spec, C-bac, D, E) • Declaration support • Monthly reporting

Information and comnlunication • Management reporting • Customer reporting on demand • Connectivity • Radio Frequency • Internet

4.5 Radio Frequency

Direct database access remotely from mobile devices can reduce costs, increase

productivity, and enhance customer service in Warehouse environments. Therefore

Radio Frequency technology is fully integrated in our Warehousing solution.

4.6 Storagennent

Storagement is a sophisticated, complex software system for online warehouse

management and information retrieval. It uses an Intranet or the Internet to give

configurable access to users, customers and partners. Storagement requires certain

hardware and software platforms. The compatibility of components and systems not

mentioned below can be checked in individual cases. Individual or proprietary

hardware will however in many cases not be covered by our customer support and

update policy, without prior adaptation of storagement.

Storagement requires certain hardware and software platforms. The compatibility

of components and systems not mentioned below can be checked in individual

cases. Individual or proprietary hardware will however in many cases not be

covered by our customer support and update policy, without prior adaptation of

storagement.

JUNE-2003 25


5. Management Information Systems (MIS) in Distribution Centers

The Management Information System (MIS) is an information database that

provides the capability of on-line inquiry and is the source of distribution center

workload and performance statistics. It is the source data in support of Net Landed

Cost and major end item billing. Transaction records are received from DSS and

other Center operating systems into MIS, which are then sorted. MIS calculates and

produces data elements that reflect reporting requirements on distribution

processing and workload reporting for the Distribution Center and each of the 22

sites within the Distribution Center.

5.1 World-Wide Express (WWX)

WWX began providing international commercial express small package service to

OCONUS locations in 1998. This contract allows Centers to ship materiel weighing

150 pounds or less direct to overseas locations using commercial small parcel

carriers such as FedEx. The carrier is responsible for all customs clearances and the

delivery goal varies from 2-6 days. Some carriers can move cargo heavier than 150

pounds. (CAR III-64)

5.2 Commercial Air Lines of Communication (COMALOC)

COMALOC is a transportation initiative that provides overseas delivery of air

pallet shipments from the Principal Distribution Sites (PDSs) using commercial

carriers. This initiative requires delivery of air pallets within 4 business days.

It has significantly improved responsiveness to customers in OCONUS locations,

reducing in-transit time from an average of 10-14 days to less than 4 days. The

carriers are responsible for customs clearance and scheduling delivery times to

meet customer's requirements.

JUNE 2003 26


5.3 Medical Express (MedEx)

Similar to COMALOC, this initiative was developed to support hospitals and

medical clinics overseas. Materiel is received, processed, and consolidated at the

PDSs and shipped by commercial air. Unlike COMALOC, the materiel is not

consolidated on air pallets. Rather, it is shipped on skids, cartons, wooden pallets,

and boxes. Deliveries generally occur within 4 business days. The carrier is

responsible for customs clearance.

5.4 Radio Frequency Tagging (RFfag)

This initiative uses radio frequency technology to track air pallet and Seavan

shipments from the SDPs to customers in OCONUS locations . The RFTag is

interrogated as it moves through the transportation channels providing moment-to

moment in-transit visibility using web technology. The customer can readily

determine where the supplies are and download information on the pallet or van to

determine what is being delivered.

5.5 Automated Manifest System (AMS)

Designed in conjunction with RF Tags, the AMS was developed to increase the

accuracy of tracking materiel to receipt by the customer. AMS eliminates the need

for hardcopy documentation with a shipment. Instead, the supply information for

each shipment is captured on a credit card size optical memory card. Each AMS

JUNE - 2003 27


card has the ability to hold 1,200 pages of data.

When the customer receives shipments with AMS cards attached, he or she simply

runs the card through a reader, much like an ATM card, and downloads the manifest,

Government Bill of Lading (GBL), Materiel Safety Data Sheet (MSDS), and other

receipt-related data directly into the user's personal computer. Users can then

manipulate this data to develop work lists, segregate materiel, confirm receipt, and

prepare Supply Discrepancy Reports.

5.6 Dedicated Truck Deliveries

Dedicated Truck Deliveries were established to support high volume customers that

receive numerous shipments from DDC Centers.

Coordination is accomplished with the intended customer to get an agreement to

deliver all cargo, regardless of priority and size, up to 5 days per week. Delivery

times and delivery locations are pre-arranged by customers when Dedicated Truck

service is scheduled.

This is a win/win initiative for the customer. Saves transportation costs, and the

customer knows exactly when his materiel will arrive. It also allows the customer

to have orders bypass the central receiving point, thus saving additional on-base

time.

5.7 Call Centers

Many activities have established Call Centers to respond to customer inquiries and

provide status of shipments from all Centers.

JUNE - 2003 28


5.8 Performance Oriented Packaging (POP)

POP was developed in conjunction with the United Nations to address the

movement of hazardous materiel. POP specifically identifies the packaging and

marking requirements for movement of hazardous materiel, by packaged quantity

and mode of shipment.

Under POP, certain packaging materials are "POP Certified" and must be used in

specific instances. DC is the librarian of test reports, maintains a software program

that allows users to select approved packaging materials and teaches this course of

instruction.

5.9 Business Systems Modernization

This Business Systems Modernization strategy will result in a new enterprise

business architecture, which will enable to re-engineer its logistics processes to

reflect best commercial practices. It will also contribute to improved military

readiness by achieving the Joint Vision 2020 concept of Focused Logistics.

Within four years, will have said goodbye to venerated, yet antiquated, materiel

management systems. Replacing programs dating back to the 1960s will be state

of-the-art software representing the best of today's business applications. In

addition to information technology replacement, BSM will also enable to take on

industry best practices, collaborate more directly with customers and suppliers and

provide best-value solutions. BSM will replace such programs as the Standard

Automated Materiel Management System and Integrated Subsistence Management

System.

BSM involves system and technology change, along with process reengineering

and other elements. It also requires new jobs and new tools. BSM will affect every

JUNE-2003 29


aspect of DLA business, including forecasting customer needs. BSM employs three

major commercial off-the-shelf software components that will form the major

building blocks of the new system. The three software packages are SAP,

Manugistics and PD2. SAP will focus on order fulfillment, planning and financial

management. Manugistics will focus on demand and supply planning activities.

BSM is, in reality, a single set of business processes and practices that will be

institutionalized as BSM is deployed.

5.10 lJPS Competes Globally with Information Technology (case)

United Parcel Service, the world's largest air and ground package Distribution

Company, started out in 1907 in a close-size basement office. Jim Casey and

Claude Ryan - two teenagers from Seattle with two bicycles and one phone -

promised the "best service and lowest rates." UPS has used this formula

successfully for over 90 years.

UPS still lives up to that promise today, delivering more than 3 billion parcels and

documents each year to the United States and to more than 200 other countries and

territories. Critical to the firm's success has been its investment in advanced

information technology. Technology has helped UPS boost customer service while

keeping costs low and streamlining its overall operations.

Using a handheld computer called a Delivery Information Acquisition Device

(DIAD); UPS drivers automatically capture customers' signatures along with

pickup, delivery, and time-card information. The drivers then place the DIAD into

their truck's vehicle adapter, an information-transmitting to UPS's computer

network for storage and processing in UPS's main computer in Mahwah, New

Jersey. From there, the information can be accessed world wide to provide proof of

JUNE - 2003 30


delivery to the customer. The system can also generate a printed response to queries

by the customer.

Through its automated package tracking system, UPS can monitor packages

throughout the delivery process. At various points alone the route from sender to

receiver, a bar code device scans shipping information on the package label; the

information is then fed into the central computer. Customer service representatives

can check the status of any package from desktop computers linked to the central

computer and are able to respond immediately to inquiries from customers. UPS

customers can also access this information directly from their own computers,

using either the World Wide Web of the Internet or special package tracking

software supplied by UPS.

Anyone with a package to ship can access the UPS Web site to check delivery

routes, calculate shipping rates, and schedule a pickup. Eventually people will be

able to use the Web to pay for their shipments using credit card or business account

that tracks on-line purchase orders for large regular customers. The data collected at

the UPS Web site are transmitted to the UPS central computer and then back to the

customer after processing. UPS recently started a new service called UPS

Document Exchange to deliver business documents electronically using the Internet.

The service provides a high level of security for these important documents as well

as document tracking.

UPS's Inventory Express, launched in 1991, warehouses customers; products and

ships them overnight to any destination the customer requests. Customer using this

service can transmit electronic shipping orders to UPS by 1 :00 a.m. and expect

delivery by 10:30 that same morning. UPS is enhancing its information system

capabilities so that it can guarantee that a particular package, or group of packages,

will arrive at the destination at a specified time. If requested by the customer, UPS

JUNE- 2003 31


will be able to intercept a package prior to delivery and have it returned or rerouted.

JUNE-2003 32


6. Content of the Management Information in a Distribution Center

6.1 Analysis on the Layers of Information Management in a Distribution Center

The information management in a distribution center is dealt with in three different

layers (Fig. 6.1).

Equipment Information

Strategic Decision-making

Layer

Business Management

Layer

Inventory Information

Business Operation

Layer

Fig. 6.1 (Information Management Layers in a Distribution Center)

The purpose of information management at the business operation layer IS to

arrange routine job tasks, rationally plan and utilize the resources of the distribution

center and provide the upper layer with necessary management data. The

information management at the business operation layer in the distribution center

includes: transmitting, processing and monitoring the information of documents;

determining prices; maintaining and using the information about equipment such as

vehicles; planning the commodity packaging and processing in circulation; taking

JUNE - 2003 33


information about warehousing in and out; tracking and inquiring the information

about job status; customs declaring for exported goods; taking financial information;

etc.

The purpose of information management at the business management layer is to

conduct the achievement and efficiency examination and assessment through

statistic analysis on routine operation information, and work out or revise job plans

of the distribution center on the actual basis. The information management at the

business management layer in the distribution center includes: cost accounting and

account settling; management and analysis of information about customer

relationship; information about transport and distribution scheduling; and inventory

planning and analyzing. The purpose of information management at the strategic

decision-making layer is to conduct analysis and simulation by using the utility

model based on the routine operation information and analysis in combination with

external information analysis in relation to the distribution center, assess the overall

business of the distribution center, draw up the composite resources allocation

scheme for the distribution center, give scientific and rational forecasting, and

define the targets of business development and strategy. The information

management at the strategic decision-making layer in the distribution center

includes: analysis on the market environment information, forecasting information,

model information and emulation results; and strategic planning.

6.2 Basic Work Flow of Information Management in a Distribution Center

The basic work flow in carrying out the above-mentioned information management

is described as follows:

1. Document processing and monitoring

The business basis of the distribution center starts from customers' inquiries and

JUNE - 2003 34


business departments' quotations. After accepting the orders, the business

department should check the stock level on the delivery date, the loading/unloading

capacity, load of the processing in circulation and load of the distribution so as to

meet the customers' demand and monitor the execution of orders. In case it is

unable to deliver goods according to the customer's requirement in the order, the

business departments should conduct coordination. Further, they should sum up the

ordered quantity in those period, schedule goods and arrange the procedures and

quantity of goods for delivery the returned goods data processing is also performed

at that stage. Besides, the business department should work out the quotation and

make the quotation history management, and fix the minimum batch ordered by

customers, mode of ordering and the order settlement deadline.

2. Operation of procurement and warehousing

After accepting the order, the distribution center will purchase goods while

summing up the quantities of demanded commodities and inquiring of the supplier

about the transaction conditions. Then they should make the purchase list based on

the demands. After the purchase list is issued, the operation of goods warehousing

is started. The job scheduling and warehouse platforms scheduling are conducted

according to the warehousing date specified on the purchase list. On the same day

when the goods are warehoused in, the warehousing records should be checked and

the goods should be inspected. Any discrepancy in quality or quantity of the goods

should be corrected or disposed appropriately at once with the data entered.

3. Operation of inventory management

The operation of inventory management includes the warehouse management and

inventory controL The warehouse management includes: stock lying out and stock

space division; control of goods coming in and going out; stock handling tools and

procedure arrangement; and stock space adjustment and changing. The inventory

control is to confirm the purchase quantity and schedule according to the number of

JUNE- 2003 35


commodity to be delivered and time length needed for warehousing make the

precaution system for purchasing, draw up the inventory checking schedule, and

check the inventory, correct the inventory account and work out the inventory

profit/loss statement according to the schedule. The inventory management also

includes the custody and maintenance of packing and transporting vessels. For

some distribution centers that just start their business, they have to deal with lease

out or in of warehouses, and should consider the extra management of leased

warehouses.

4. Operation of goods makeup and pickup

The orders should be statistically inquired to know the goods demand. If the stock

level can meet the delivery demand on the day of goods ex-warehouse the goods

pickup sheet for ex-warehouse and various goods pickup instructions can be printed

out according to the demanded quantity for arranging the goods pickup space,

selecting tools and allocating workers. Any shortage of the goods should be made

up, for which, the made-up quantity and goods making up schedule should be

worked out, the goods making up job be arranged and workers be allocated.

5. Operation of processing in circulation

The processing in circulation can realize the added value of the goods. The

operation includes commodity sorting, weighing, unpacking and repackaging,

labeling and commodity reassembling and packaging. These need management of

packing materials and packing vessels, reassembling and packaging planning,

selection of packing tools for processing in circulation, job scheduling for

processing in circulation, and workers allocation.

6. Operation of ex-warehouse warehouse and distribution

The operation of ex-warehouse warehouse and distribution should be performed

after the goods pickup and processing in circulation. The operation of ex-

JUNE- 2003 36


warehouse warehouse includes printing out the delivery note based on the order,

drawing up the delivery schedule, printing out the goods batch statement, delivered

address label and delivery checklist, selecting the method, tools and workers for

goods collection, and determining the vehicle tonnage and number. The operation

of distribution includes goods loading on truck, transport routing, midway tracking,

and control and accident disposal.

7. Financial operation

The receivable account bill should be worked out according to the delivery data

after the goods distribution is completed, and the bill should be transferred to the

accounting department as the payment collection evidence. After the goods are

warehoused in, the receiving department also makes the statistic statement as the

evidence of payment to the supplier. The accounting department makes various

accounting statements for reference for drawing up the business policies and

business management.

8. Operation of business management and achievement & efficiency

management

Senior staff members must deal with the efficiency management of the distribution

center through various examinations and assessments, and work out the business

policies and strategies. The business management and achievement & efficiency

management are conducted with various information and statements provided by

each work personnel and mid-level managerial personnel, including different types

of statistic data, feedback from customers about the business of the distribution

center, analysis of the job errors and stock shortage, report on automat zed tool

wastage and maintenance, consumption of fuel and consumable materials,

equipment cost analysis, casual workers, returned goods statistics, employees'

efficiency and so on.

JUNE-2003 37


7. Configuration and Construction of the Information Management System Platform in a Distribution Center

7.1 Structure of the Information Management System Platform in a Distribution Center

The information management system platform in a distribution center shall have

the functions of processing and generating the above-mentioned information

management content of the distribution center, summarized as follows:

}.> planning and monitoring routine operation with rational optimization of

goods handling and transporting and with goods tracking;

}.> the capability of electronic data inter-exchange (EDI) to meet the information

interaction with partners in the supply chain;

}.> the capability of information added value service, such as checking the goods

status, etc;

~ communication with the financial service and governmental departments and

the environment for e-business operation;

}.> support for decision making in business management.

According to the characteristics of information management in the distribution

center and the corresponding functions, the management information system

platform for the distribution center can be divided into five platforms and one

shared data center:

}.> the EID platform: document entry standardization and translation, and

information transmission standardization;

}.> the operation management platform: basic management information system

for the logistic center;

JUNE - 2003 38

Study on Establishment of Management Information Systems rMIS) in Distribution Centers

>- the e-business platform: including the on-line transaction handling,

transaction status checking and transaction fund information processing;

>- the information release platform: release of the business functions, transport

distance, charge inquiry and related information of the distribution center;

>- the management decision making platform: providing the function of

advanced management decision making support;

>- the shared data center: providing the basic data for operation of all functional

platforms as well as access authority management.

Management decision-makina platform

enUaIia1 & dadsicn-f1'BIcjrg resUt da:lav

II a ISQ9Ileft dadsicn-f1'BIcjrg rn::d:!I aBysis db QlCra:t ad

a:nasia1

I I

' ,I logistic release sentice performance' :

centre of for on-line transaction transaction ' resources business i & i

sentice market customers ansaction status processing, I

planning managementl efficiency i

guide information complaints handling tracking system I system management' system 'i

Information ~Ieose platform E-business ~Iatforrn Operation manaohment platform I 1 1

/ standard documents(

collection

--i shared dat~ L I

document transaction & I centre J conversion

\ C standard data C !

conversion illLQIatform ,

Figure 7.1 (Framework of the Information Management Platform of the Distribution Center)

7.2 Network Configuration of the Management Information System in a Distribution Center

In view of the characteristics and content of the information management in the

above analysis, the model of internal information management network, i. e. the

Intranet, can be created by using the matured Internet technology with open

standards in construction of the management information system for the

JUNE-2003 39


distribution center. The Intranet model is an Internet-based web model, while the

basic mode of web is the browse/server. Therefore, this model can be called the

browse/server modeL With the configuration of client/server system having three

layers, it is the assembly of the Internet-based web technology with such concepts

as the "fire wall" and agency service. It can be an independent system and also can

be conveniently linked up to form a part of the Internet to obtain more flexible

external applications. It uses TCP/IP as the communication protocol for the internal

network and utilizes the Internet-based web model as the standard platform. In the

event that the safety is required, the internal network is separated from the Internet

through the "fire wall". According to the sorting for the reference models of

interconnection in an open system, the devices downstream of the transmission

layer use the TCP/IP protocol as the basic transmission control protocol based on

which different application platforms are created.

Construction of the Intranet model include the following contents: selection of the

operation system for the network and use of the TCP/IP transmission protocol;

creation of the web, FTP domain name and e-mail server; agency server; creation

of the fire-wall server; the web linked up with the company database; and

realization of client browse. The network topology is as shown in Figure. 7.2.

The ex-net is introduced at the same time of construction and perfection of the

Intranet model. The ex-net is the extended application of the Intranet model of the

distribution center. It is used to form a system between companies. It links up the

distribution center with the partners in the supply chain to fulfill the common

targets. The ex-net is an external network under control. On one hand, the

distribution center communicates the partners in the supply chain through the

Internet technology. On the other hand, it provides the safety system to prevent

external customers from accessing the internal data of the logistic center. Thus

access of two different types of main bodies is realized: individual customers can

JUNE - 2003 40


access the Intranet of the distribution center through the Internet, while the partners

in the supply chain can be accessed through the ex-net of the distribution center.

& l1o"prnlTlPn

.... "' ... "'.

[ operation

EDI e-business management shared management i+-----o I----- information

platform platform platform release decision data

platform platform centre

Figure 7.2 (Network Topology of the Information Management Platform

of the Distribution Center)

JUNE - 2003 41


8. Guideline for Construction of the Management Information System in a Distribution Center

Construction of the management infonnation system in a distribution center must

be perfonned on the actual basis and step by step with three "combinations", i.e.

combination of the world advanced technology and the actual situation of

individual country; combination of the conventional operation method and the

international practice; and combination of the conventional business and e-business.

Meanwhile, it should be considered to well conduct the renewal, utilization and

upgrading of existing computer systems. For the development and construction,

multiple distribution centers may establish a common data service center to reduce

the cost and realize the specialized management and maintenance. For the

development strategy, the "three-stage" development mode can be adopted, i. e. the

stage of the operation management system development, the stage of fully automat

zed management and the stage of the e-business development oriented to the supply

chain.

The main tasks at the stage of the operation management system development are

to complete the construction of the operation management platfonn for the

distribution center and create the Intranet in the enterprises by using the modem

electronic infonnation technology. The main features realized at this stage are:

operation rationalization, statements and documents rationalization and

standardization, computer infonnation processing and release of the summary and

statistics.

The main tasks at the fully automat zed management stage are to realize the

automation of infonnation collection and overall combination of the automatic

monitoring of storage, handling and transport systems through computers with the

operation management. The main features at this stage are: integration of computer

JUNE-2003 42


hardware and software, perfection of the database management center, automatic

communication of the computer data, computer-aided statistic analysis and decision

making support.

The tasks at the stage of e-business development oriented to the supply chain is to

complete the construction of ex-net for enterprises and realize cooperation with the

financial service and governmental departments concerned so as to completely tum

into the e-business.

JUNE 2003 43


9. Conclusion

Business monitoring is an important foundation for an enterprise positioning

system, but this foundation must be complemented by a range of analytic

applications focused on the specific data analysis needs of individual data

collection systems. E-business analytics is about more than traditional business

analytics, in e-business, important data collection systems exist outside of the ERP

system that houses the target data leveraged by most traditional business analytic

software. The data collection systems used for e-mail, supply chain, and e

commerce management need their own specialized analytical systems focused on

click ream, message, and process analytics.

Managers perceIve business challenges in the environment; they set the

organizational strategy for responding; and they allocate the human and financial

resources to achieve the strategy and coordinate the work. Throughout, they must

exercise responsible leadership. Management's job is to "make sense" out of the

many situations faced by organizations and formulate action plans to solve

organizational problems. The business information systems described in this

dissertation reflect the hopes, dreams, and realities of real-world managers.

Information System (IS) from an integral part of modern organizations and business

computer-based ISs are now used to support all aspects of an organization's normal

functions and activities ... For many businesses and industries, information systems

(IS) have become an increasingly intrinsic part of business operations. In addition

to the use of IS for back-office operations, there has been a growing awareness of

the IS function's potential to directly contribute to the strategic objectives of the

organization.

New technology creates new opportunities for forward-thinking companies. Higher

JUNE- 2003 44

Study on Establishment of Management Information Systems (MISj in Distribution Centers

levels of automation, high speed communications and improved access to

information can all provide significant benefits to a modem business organization.

However, the benefits of new and emerging technologies can only be realized once

they have been harnessed and direct towards an organization's goals.

How to use Management Information Systems (MIS) in the warehousing and

Distribution centers is the key I discussed in this dissertation. Construction of the

Management System in a distribution center must be performed on the actual basis

and step by step with three "combinations", i.e. combination of the world's

advanced technology and the actual situation of individual country; combination of

the conventional operation method and the international practice; and combination

of the conventional business and e-business. Meanwhile, it should be considered to

well conduct the renewal, utilization and upgrading of existing computer systems.

For the development and construction, mUltiple distribution centers may establish a

common data service center to reduce the cost and realize the specialized

management and maintenance. For the development strategy, the "three-stage"

development mode can be adopted, i. e. the stage of the operation management

system development, the stage of fully automat zed management and the stage of

the e-business development oriented to the supply chain.

JUNE- 2003 45

Reference

Books:

Infonnation Society Ireland - Strategy for action, Report of Ireland's Infonnation Society Steering Committee

Richard 1. Daft, Management (5th, Edition)

John Sheldrake, Management Theory, From Taylorism to Japanization

Ian Worthington, Chris Britton, The Business Environment (2nd, Edition)

J. Stewart Black, Lyman W. Porter, Management Meeting New Challenges

Peter F. Drucker, Management Challenges for the 21 st Century

Sultan Kennally, Total Management Thinking, Ideas that are Transfonning Management

EDI and E-Business [M], Chinese Electronic Information System Popularization Office, Beijing: Tsinghua University Publisher, 1999.

Supply Chain Management and Information Technology [M], Song Yuanfang, Beijing: Economic Science Publisher, 2000.

Book from CD-Rom:

Grauntt,J.,Jurin, B. 1999, E-business Technology Forecast 2001-2003, [CD-ROM], P490-P503, P785-P786, Price Waterhouse Coopers, California

A

Websites:

www.ddc.dla.milllnfotech/Default.asp

www.dependableinc.com/Companies/ ddc/

www.inlandstar.com/Current.html

www.cern.com

www.fbi.com

www.ire1and.com

www.internetireland.com

www.ebusiness.com

www.ecommercetimes.com

B

Bibliography

Books:

Jeffrey F. Rayport, Bernard J. Jaworski, "e-commerce" (International Edition 2001)

Angell David, "Windows Remote Access Toolkit" (1997)

Bernstein Terry, "Internet Security for Business" (1996)

Cheswick William R., "Firewall and Internet Security" (1994)

Dawson Christina, "The Essence of Computing Projects" (1999)

Ellis Juanita, "The Internet Security Guidebook" (2001)

!be Oliver C, "Remote Access Networks and services" (1999)

McMullen Melanie, "Network Remote Access and Mobile Computing" (1994)

O'Brien Jennifer, "Technology Bridge the Gap" (Computer Dealer News, Issue September grd, 1999)

Orubeondo, Ana, "The Enterprise Goes Wireless" (Info World, Issue February 19th, 2001)

Robichaux Paul, "Remote Access 24 Seven" Sybex Incorporated"

Roth Cliff, "Mobile Computing for Dummies" (IDG Books, 1997)

Sybex, "Networking Complete" (Sybex International)

J. Stewart Black, Lyman W. Porter, "Management Meeting New Challenges"

c

Paul Bocij, Dave Chaffey, Andrew Greasley, Simon Hickie, Edited by Dave Chaffey "Business Information Systems - Technology, Development &. Management"

Michael E. Porter, Victor E.Millar "How information gives you competitive advantage" [Harvard Business Review (July-August 1985)]

Edited by Cynthia A. Montgomery, Michael E. Porter "Strategy - Seeking and Securing Competitive Advantage" (Harvard Business Review)

Edited by Michael Earl "Information Management - The Strategic Dimension"

TournaI Articles: •

Dunmore, T.2002, "Why wireless will change your life", in Stuff Magazine, May

Evans, D. 2001a, "Next gen mobile", in T3 Magazine, November vol.65

Evans, D. 2001b, "Pocket Power", in T3 Magazine, August vol.62

Hill, R. 2002, "Access All Areas", in T3 Magazine, January vol.68

Hill, R. 2001a, "Radio Heads", in T3 Magazine, Christmas vol.67

Hill, R. 2001b, "Talking Japanese", in T3 Magazine,July vol. 6 1

Hill, R. 2001c, "The call of the wild", in T3 Magazine, December vol.66

Fulmer, 1. 2002, "Combo Fever", in T3 Magazine, April vol. 71

Smith, N. 2001, "A cheaper alternative to satellites", in Focus, vol. 1 05

Waegh, R. & Robby Elson, 2001, "Meet your next phone", in Stuff Magazine, September

D

"Has Microsoft spawed the Palm killer" 2002 Jan vo1.68

Websites:

www.logical.com

www.3gnewsroom.com

www.tektronix.com

www.ittc.ukans.edu

www.rast.etsi.org/rast7 / pd38.ppt

www.umbs-hitech.net/recruiting/presentation/prtmtalk.pdf

www.mobilewhitepapers.com/pdf/3g.pdf

www.nokia.com

www.m2m.com

www.kpmg.com

www.klm.com

www.eink.com/iim/benefits.html

www.enn.ie/news.html

www.3g.co.uk

www.ananova.com/news/ story/

E

Appendices - Questionnaire and Interview Guide

Questionnaire:

Q 1. To what extent are you concerned about the following public policy issues?

Not At All Not Very Somewhat Very Concerned Concerned Concerned Concerned

Crime 1 8 38 53 The environment 3 12 44 40 Health care 2 11 33 54

Education 2 7 33 58 Loss of personal privacy 2 10 32 56 Racial tensions 6 24 40 30 Social Security 3 13 39 45 Taxes 3 10 36 52

Q2. How many times have you placed an order for products or services online in the last 12 months?

23 0 48 1-5 14 6-10 6 11-15 9 16 or more

Q3. Why haven't you bought anything online in the last 12 months? Please check aU that apply.

57 Mraid my credit card number will be stolen if given online 57 Concerned that my personal information may be abused 38 Worried those sellers may be fraudulent 26 Want to be able to talk to someone when I place an order 37 Don't know if sellers will be reliable 47 Want to see a product in person 25 Other

F

Q4. Where do you usually look for infonnation about online privacy and security? Please check all that apply.

8 Government source 9 Nonprofit consumer organization 39 My Internet service provider 5 A computer manufacturer 6 Books 21 Magazines 22 Newspapers 17 Online news groups 11 Other 40 I haven't looked for that information

Q5. When you use the Internet, how concerned are you about each of the following possibilities regarding your privacy?

Not At All Not Very Somewhat Very

Web sites I visit may put me on their mailing lists even though I do not request it Web sites track my movements when I browse the site, but don t tie that infonnation to my name or real world identity Web sites merge my browsing habits and shopping patterns into a profile that is linked to my real name or other

Concerned Concerned Concerned Concerned

4 18 34 45

16 33 29 22

4 14 29 53

G

personally identifiable infonnation Web sites provide my infonnation to other organizations without my knowledge Web sites collect infonnation about me without my knowledge

2

3

9 25

10 27

Q6. Please check all of the statements below that you believe to be true.

34 It's illegal for Web sites I visit to share or sell information I provide about myself with others unless I am notified and agree.

18 Web sites can legally share personal information they collect from children under 1 3 with others as long as they clearly state that policy on their sites.

9 Web sites must be certified as secure by the government.

53 There is no way to tell if infonnation I provide to websites is secure.

29 None of these are true.

Q7. To your knowledge, have you ever personally been a victim of any of the following? Please check that apply.

3 My financial or other sensitive

64

59

information was stolen by someone while I was

H

2

28

1

8

66

transmitting it to a website.

Someone got into a company database and stole my computer information.

I got a virus on my computer via email.

Someone used information that I provided online to stalk me or threaten me.

My privacy was invaded when I was using the Internet.

I haven t been a victim of any of these.

Interview Guide (Questions):

Q. Please tell me about your business.

Q. Where do you market your products?

Q. Do you think your products are more successful in the current business environment? Why?

Q. Why did you decide to locate .....• in •..... ?

Q. Where do the consumables come from?

Q. Who are your main users?

Q. How was business last year? What about this year?

Q. What's it like working at ..••.. ?

Q. Any final comments?

I

by: darning zhang portobello college dublin

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